George Chamberlin's Money in the Morning

Don't do something, just stand there. Yes, my favorite quote from legendary investor John Bogle regarding what to do during stock market turmoil seems very appropriate for the policy decision yesterday by the Fed. Despite an unemployment rate that suggests full employment in the United States and the lack of any significant inflation in the United States, the Fed opted yesterday to leave short-term interest rates unchanged, basically at zero.

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For the first time ever, the Fed announcement looked beyond the domestic economy to shape policy. "Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," cites the official statement issued yesterday after the two-day meeting. The problem, evidently, is the lack of inflation here with the possibility of even lower prices pressures. The sharp drop in gasoline prices, down 4.1 percent in August, has taken the CPI into negative territory.

******The question being asked today regarding the Fed is "if not now, when?" What could possibly happen between now and the next Fed meeting in October that would give the green light for a rate hike?

******Interestingly, a report from the Conference Board this morning, the index of leading economic indicators, rose this month as "employment, personal income and manufacturing and trade sales have all been rising, helping to offset the weakness in industrial production in recent months." The LEI also says, "economic growth will remain moderate into the New Year, with little reason to expect growth to pick up substantially."

******Wall Street has made it clear it does not appreciate the caution of Janet Yellen and the Fed. When Yellen began her press conference yesterday after the statement released yesterday the Dow industrials were up about 150 points. As soon as she started talking, the markets started to fade and finished with a loss of 65 points. The selloff followed through this morning with the index falling another 280 points.

******Lots of buzz around town regarding the decision by Qualcomm to cut as many as 1,300 jobs here in San Diego and at other global locations. The action, of course, was well telegraphed back in July when the company issued its most recent quarterly report. CEO Steve Mollenkopf said Qualcomm has "launched a comprehensive review of our cost structure and announced a Strategic Realignment Plan designed to improve execution, enhance financial performance and drive profitable growth." In plain English that means cut jobs. Qualcomm shares are down slightly this morning at around $54.50, but well below the 12-month high of $78 last October.

******Jordan Spieth carded a hole-in-one yesterday in the first round of the BMW Championship near Chicago, the latest round in the Fed Cup. Spieth has been struggle as of late missing the cut into past two rounds but played well yesterday in a group including Jason Day, the best player in the world right now, and Rickie Fowler, the winner of the last tournament two weeks ago.